Justia Arbitration & Mediation Opinion Summaries

Karl McGhee, a financial advisor at LPL Financial, acted as financial planner for Plaintiff. Plaintiff filed a complaint against McGhee and LPL, asserting claims for, inter alia, violations of Mass. Gen. Laws ch. 93A. Defendants moved for an order compelling the parties to proceed to arbitration due to an arbitration agreement signed by Plaintiff. The motion judge denied the motion, concluding that none of Plaintiff's claims could be compelled to arbitration because claimants under chapter 93A, section 9 are not required to submit to arbitration. The Supreme Court reversed, holding (1) claims alleging an unfair or deceptive trade practice in violation of chapter 93A, section 9 must be referred to arbitration where the contract involves interstate commerce and the agreement is enforceable under the Federal Arbitration Act (FAA); and (2) because Plaintiff and Defendants in this case entered into a valid contract whereby they agreed to settle all controversies related to Plaintiff's financial account by arbitration, and because the arbitration agreement was governed by the FAA, Defendants as a matter of law were entitled under the FAA to a stay of judicial proceedings and an order compelling arbitration. Remanded.View "McInnes v. LPL Fin., LLC" on Justia Law

Although respondents' credit card agreement required their claims to be resolved by binding arbitration, they filed a lawsuit against petitioner and a division of petitioner bank, alleging, inter alia, violations of the Credit Repair Organizations Act (CROA), 15 U.S.C. 1679 et seq. At issue was whether the CROA precluded enforcement of an arbitration agreement in a lawsuit alleging violations of the Act. The Court held that because the CROA was silent on whether claims under the Act could proceed in an arbitrable forum, the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., required the arbitration agreement to be enforced according to its terms.View "CompuCredit Corp. v. Greenwood" on Justia Law

Respondents filed a complaint against AT&T Mobility LLC ("AT&T"), which was later consolidated with a putative class action, alleging that AT&T had engaged in false advertising and fraud by charging sales tax on phones it advertised as free. AT&T moved to compel arbitration under the terms of its contract with respondents and respondents opposed the motion contending that the arbitration agreement was unconscionable and unlawfully exculpatory under California law because it disallowed classwide procedures. The district court denied AT&T's motion in light of Discover Bank v. Superior Court and the Ninth Circuit affirmed. At issue was whether the Federal Arbitration Act ("FAA"), 9 U.S.C. 2, prohibited states from conditioning the enforceability of certain arbitration agreements on the availability of classwide arbitration procedures. The Court held that, because it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," quoting Hines v. Davidowitz, California's Discover Bank rule was preempted by the FAA. Therefore, the Court reversed the Ninth Circuit's ruling and remanded for further proceedings consistent with the opinion.View "AT&T Mobility LLC v. Concepcion" on Justia Law

Plaintiffs filed suit against RAC after entering into a rental agreement with RAC for a wooden trundle bed and mattress infested with bedbugs. On appeal, plaintiffs challenged the district court's order compelling arbitration of their breach of warranty claim under the Magnuson-Moss Warranty Act, 15 U.S.C. 2301 et seq. Relying on regulation promulgated by the FTC under its authority to interpret the Act, plaintiffs argued that RAC could not require binding arbitration as part of a consumer warranty. The court concluded that the district court erred in holding that the FTC regulations contained no ban on binding arbitration. However, the FTC arbitration ban simply did not apply to plaintiffs' rental agreement with RAC. Because plaintiffs have not linked RAC's warranty to any sale, they failed to establish the existence of a written warranty under FTC regulations. Accordingly, the binding arbitration clause was enforceable and the court affirmed the judgment of the district court. View "Seney v. Rent-a-Center, Inc." on Justia Law

Plaintiffs filed a putative class action suit against CMH Homes, Vanderbilt and others in state court. The companies subsequently filed a petition in the district court alleging that plaintiffs' claims were subject to mandatory arbitration. The district court dismissed the petition. The companies argued that the district court erred by concluding that it lacked diversity jurisdiction. The court concluded that the district court correctly reasoned that Vaden undermined Advance America and required the court's departure from that precedent. Following the Vaden approach, the district court properly looked through the arbitration petition to the state court complaint to determine the amount in controversy. Nonetheless, the court remanded for the district court to calculate an amount in controversy and to determine on that basis whether it had jurisdiction over the putative class action under 28 U.S.C. 1332(d)(2). View "CMH Homes, Inc., et al. v. Goodner, et al." on Justia Law

Plaintiffs filed a putative consumer class action suit against DirecTV and Best Buy, alleging violations of California's consumer protection laws. The arbitration agreement at issue in this instance was a customer service agreement between DirecTV and individuals who believed they purchased DirecTV equipment from Best Buy stores. AT&T Mobility v. Concepcion held that Section 2 of the Federal Arbitration Act (FAA), 9 U.S.C. 2, preempted the State of California's rule rendering unenforceable arbitration provisions in consumer contracts that waive collective or class action proceedings. The court concluded that the arbitration agreement in this case was enforceable under Concepcion and, therefore, the district court did not err in compelling plaintiffs to arbitrate their claims against DirecTV. The court concluded, however, that plaintiffs were not required to arbitrate their claims with Best Buy. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Murphy v. DirecTV, Inc." on Justia Law

Green sued under the Truth in Lending Act, 15 U.S.C. 1606, claiming that U.S. Cash Advance misstated her loan’s annual percentage rate. The lender requested arbitration under the loan agreement, which referred to “binding arbitration by one arbitrator by and under the Code of Procedure of the National Arbitration Forum.” The agreement was signed in 2012; the Forum has not accepted new consumer cases for arbitration since 2009, when it settled a suit alleging bias in merchants’ favor. The lender asked the court to appoint a substitute arbitrator under 9 U.S.C. 5. The judge declined, stating that identification of the Forum as arbitrator was “integral.” The Seventh Circuit reversed, reasoning that the agreement calls for use of the Forum’s Code of Procedure, not for the Forum itself to conduct proceedings. The court noted that the lender will have to “live with” the judge’s broad discretion in choosing an arbitrator, who might be familiar with practices in the payday loan industry or open to use of claimant classes in arbitrations, perhaps on a theory “that a consumer who would not voluntarily waive her rights under the Truth in Lending Act probably should not be deemed to have implicitly waived her right to the only procedure that could effectively enforce those rights.” View "Green v. U.S. Cash Advance IL, LLC" on Justia Law

This case involved arbitration proceedings stemming from plaintiff's class action suit alleging, among other things, that SouthernLINC's termination fees were unlawful penalties under Georgia law. SouthernLINC, a wireless provider, appealed the district court's denial of its motion to vacate two arbitration awards. Under the standard set forth by the Supreme Court in Oxford Health Plans LLC v. Sutter, the court concluded that the arbitrator did not exceed his powers under section 10(a)(4) of the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., either in construing the arbitration clause as he did or in certifying a class. Accordingly, the court affirmed the judgment of the district court. View "Southern Communications Serv. v. Thomas" on Justia Law

The cases underlying these consolidated appeals involved the purchase of an automobile. Plaintiffs purchased vehicles and signed retail installment contracts with three separate dealers. The dealers assigned their rights in the contract and vehicles to Credit Acceptance Corporation, who financed the purchases. All of the contracts contained arbitration clauses. Plaintiffs later commenced civil actions against Credit Acceptance in circuit court, alleging, inter alia, violations of the West Virginia Consumer Credit and Protection act (WVCCPA). Credit Acceptance filed a motion to compel arbitration and dismiss, which the circuit court denied, finding that the arbitration agreements were unconscionable based upon the unavailability of some of the arbitration forums named therein and because Plaintiffs in the agreements waived their respective rights to a jury trial. The Supreme Court reversed in both of the cases, holding that because one of the arbitration forums named in the arbitration agreements remained available to arbitrate the parties' disputes, and because an arbitration agreement is not unenforceable solely because a party to the contract waives her right to a jury trial, the causes must be remanded for entry of orders compelling arbitration. View "Credit Acceptance Corp. v. Front" on Justia Law

Plaintiffs commenced a putative class action against Defendant, alleging violations of Mass. Gen. Laws ch. 93A. Dell successfully moved to compel arbitration according to an arbitration agreement signed by the parties. An arbitrator concluded that the parties waived class action relief by signing the agreement. In Feeney I, the Supreme Court invalidated the class waiver provision in the arbitration agreement. In this subsequent appeal, the Supreme Court held that the arbitration agreement was properly invalidated where (1) Mobility LLC v. Concepcion, decided by the U.S. Supreme Court after Feeney I, precluded the invalidation of class waiver provisions in arbitration clauses in consumer contracts, such as the one at issue here, and therefore, Concepcion undid the principal rationale for the Court's decision in Feeney I; (2) a court is not foreclosed from invalidating an arbitration agreement that includes a class action waiver where a plaintiff can demonstrate he effectively cannot pursue a claim against the defendant in individual arbitration according to the terms of his agreement, thus rendering his or her claim nonremediable; and (3) Plaintiffs demonstrated that they could not pursue their statutory claim under the individual claim arbitration process required by the arbitration agreement. View "Feeney v. Dell Inc." on Justia Law